Economics

Burger King or Polish labels prepare for Czech customers. Also the big players are talking about our country, including Aldi and Media Markt. How could some new shopping mall look like? Hamburgers from Burger King, Aldi discount groceries, cheap electronics from MediaMarkt plus man more new, western or eastern marks, shops and restaurants.

After Gucci opened in Prague this May and Burberry, Prada or Tod’s opened last year already, the Czech Republic is no longer a country where one could enjoy shopping for cheap eastern goods like twenty years ago. Traditional foods? Sure! But a Starbucks coffee and a burger from Burger King as well.

The Czech crown is again moving the frontiers, as on wednesday it was traded for 24,06 czk/eur. It gets stronger every month.

The development is heavily influenced by weakening American dollar. Towards him, the Czech crown trades for 15,52 czk/usd. The level of 24 czk for an Euro is within reach. It is very real, czk will get over it and continue strengthening.

The real impact of the situation is that Czech exporters have real losses, e.g. the clothing company OP Prostejov announced they have to close some of their premises because of the strong currency. On the other hand, Czechs who want to travel can buy their Euros, Dollars and Pounds really cheap.

The well-known lager from Ceske Budejovice in the South Czech Republic starts to sell in China from 17th July. If Chinese decide to have a Budweiser, they are lucky. The name in Chinese – Bai De Fu means ‘A lot of luck’, something like good luck wish.

Why would the well known brand rename? A Chinese is not able to pronounce Budvar or Budejovicky, so the business managers for East Asia decided to find a new name with locals, short and optimistic one.

The golden Czech beer starts in 13 million Shanghai. The Patent Office gave the Czech Brewery licence for whole China.

The Czech Government has voted for direct sell of the package of 100% funds to a strategic partner, Topolanek stated. The strategic partner is supposed to pay more than 100 billion czk to the state. The government also set the minister of finance, Miroslav Kaluousek, to start the process of choosing the main advisor for the privatization. The office is needed for judging of the offers.

According to assumptions it will probably be a consortium of an entrepreneur of a big airport and a financial institution. The decision for direct sell was made on the basis of not very numerous privatizations on the market, and also relatively prosperous time for aviation.

Fees for longer trips within the CR are getting more expensive, and payments are expected to increase more, up to 15 percent. The record-breaking prices of oil logically reflect in prices of transport as a whole. Since the beginning of the year, when most of the forwarding agents increased charges, a litre of oil raised in price of 3 czk.

Expensive oil raises also the price, at which trucks transport companies work. According to their representatives, costs raised at least 10%. Which brings another negative effect – increase of transport prices is directly proportional with increase of prices of goods.

Cars of New York subway go to the bottom of the ocean, where they become a first class fish houses, multiplying numbers of species in the area. Prague Public Transport company doesn’t have such opportunities, so to ecologically liquidate old cars may be a problem. Usually they are sold somewhere to the east, but this time, the tramways made in communist Czechoslovakia go to other communist country – the NK.

The Capital Pchjongjang will soon have twenty Prague tramways. They have paid 26t € per one. Compared to the costs of scraping, which are about 4t € per one, this sees a good deal. The Prague Transport company would like to sell other old tramways, too, as they are being replaced by the new cars Skoda 14 Porshe, together with the very new ForCity, or Skoda 15T.
(By Petr Svec)

A litre of sold diesel oil at Czech petrol stations has beaten all the records. The price has got as high as 34,03 (1,3 €) czk /l in average. Meantime, a litre of the most sold Natural 95 gasoline sells for 32,14 czk (1,24 €).

The fears of analytics, that the prices of fuel will rise into astral heights so became true. This fierce mark up is caused mainly by non-stop growing prices of oil at world markets. A barrel of American oil costs more than 135 dollars on Thursday.

The question remains – how it is possible diesel costs more than gasoline? Because there is higher demand.

Starbacks opened its first café in Prague in June 2008, and they already have to sue a Czech company for the second time. The dispute raised over the use of Starbucks logo. Attack Media was allowed by Czech authorities to register the Starbucks Hand Crafted Collection trademark.

Attack Media originally intended wide use of the brand name, however the Industrial Property Office disapproved of any other uses than horse-riding and smoking equipment. This didn’t change matters for Starbucks – the approval of the trademark for lighters or cigar tips is harmful to the good name of the company, its deputies said.

The company promotes healthy lifestyle, sponsors an environment protection programme and takes part in other charitable events. That means, to link tobacco products and Starbucks name is unacceptable. The supreme court of administration has ruled in favour of Starbucks and ordered the municipal court in Prague to reopen the dispute. The Czech Republic is the first country in central Europe in which Starbucks has opened its cafés.

source: aktualne.cz

Meanwhile businessmen in Slovakia celebrate, Czech exporters expect losses because of strong crown to Euro exchange rates. Slovaks can pay in Euro from the next year on. European commission and European central bank didn’t put Slovaks down and gave the green light for Euro adoption. But meanwhile traders are happy, ¾ of Slovaks do not like it very much.

Strengthening of Czech Crown makes troubles for Czech exporters already; Slovakia is the second country we export the most, just behind Germany. Especially automobile factories fear losses of profits. Skoda cars worth 1,8 bil. Czk were exported last year only. The relations manager of Skoda Auto says “every time czk strengthens of 1 czk to Euro, we lose one billion.

The plan of Slovakia, to convert to Euro in 2009 seemed maybe too ambitious at the beginning, however yesterday news revealed it was quite realistic. European Commission stated they believe Slovakia will hold its growth at reasonable level even after the Euro adoption.

All in all, this suggest the European Ministers of Finance will say ‘yes’ as their final verdict next year. Czech Crown is gaining its value at very good speed, so the Czech Republic doesn’t plan to convert quickly. The ex-presidential candidate Jan Svejnar supposes that Euro adoption in 2012 would work, however the Prime Minister Pavel Topolanek stated that the idea of adopting the Euro in 2012 is unreal.

The Czech currency has gone through one of its biggest leaps in the history. During the night from 13 to 14th April 08 it cut all the records and strengthened to 23 CZK for one Euro.

During Friday, the price moved around 25 czk, and even when the incredible 23 czk for 1 € was available for only half an hour, the Czech currency came back to 25 after that, it is a clear sign it will gain more strength in near future.

The crown reacts on the foreign markets activity; businessmen at Asian markets started to buy the currency, and because there were no deals going on at the time in Europe, a small number of purchases was able to get it to such point. The currency constantly gains strength.

Sales of Bio Food increase. Czechs have spend for the food with Bio label 1,29 bil czk (49,6 mil €) compared to 2006 it is 70% more. Bio-market is supposed to grow in the coming years steadily on. An average Czech have spent 126czk on bio-food last year. Bio food have gained for the fist time more than half of a percent – 0,55%.

Notable increase was of bio fruit and vegetable. Five and a half percent of total sales of the category is in bio-fruit and bio-vegetables. But as a matter of fact, 80% of the vegetable is imported, most from Austria and Italy. This is caused by later development in the area, so the dealers need to import, before greater part of our farms become bio-farms. This should take 2-3 years.

Based on Green Marketing annual bulletin

Czech company Kofola fuses with Hoop, the biggest Polish beverage producer. From that springs a group with year income over 10 billions czk (400 mil €). The new group will enterprise in five countries with total of 210 millions citizens, and its stocks will be traded at Warsaw stock market.

The new formation of Kofola-Hoop will be directed by the owners of Kofola, who own 57% share. The second biggest shareholder is with almost 15% one of the Hoop company founders Marek Jutkiewicz.

Hoop company is after Coca-cola and Pepsi second biggest producer of soft drinks in Poland. It also acts on Russian market, where it gets 1,9 millions czk of sales. Its total sales exceeded 6 billions czk (222 mil €) per year.

Skoda Cars are dominating the Czech Market, they don’t need to reduce their prices, there are buyers anyway. This is the reason why it is possible to save up to 100t Czech coronas (3,7t €) when buying a Czech car anywhere but in the Czech Republic.

Skoda Octavia Classic with 1,6 MPI Classic sells in the Czech Republic for 459 900 czk. In Germany in is 50 thousands cheaper, similar prices are in Poland or Slovakia.

If you go for your Octavia to Russia or Latvia, it can get even more cheaper. In Russia, Octavia in basic equip costs 386t czk, in Litvia even 350t czk.

Lesser differences are with Fabias or other models. There is also a little catch- the version ‘Classic’ means something different, as you get more equipment in the version sold in the CR. Anyway for Czechs it is a good reason for going shopping to the east.

The car factory have raised its net profits of 44,5% to 16 billions czk. During last year, Skoda Auto sold 630 032 cars worldwide. Compared to 2006, it is 14,5% increase in sales, which is the best sale outcome in the company history.

The car company Skoda Auto wants to double production in India, also it has recently introduced itself on a motor-show in Australia.

The model series with most sales is Octavia with 240 thousand (which is about 20% more than the year before last), by which it outrun another favorite model series – Fabia. There was 230 thousand Fabia cars sold in 2007.

Czech embassies could offer paid services of CzechTrade company almost in all countries. CzechTrade is the National Trade Promotion Agency of the Ministry of Industry and Trade of the Czech Republic.

CzechTrade´s main objective is to promote international trade and cooperation between Czech and foreign companies. CzechTrade´s professional information, assistance and consulting services accompany Czech exporters to foreign markets, and the agency is a contact partner for firms entering the Czech market, seeking interesting and reliable business partners and suppliers.

Examples of successes of Czech Companies with aid of Czech Trade:

Ferrit company have successfully entered Chinese market. Town of Luan inc Shanxi has received first two monorail locomotives this February.

Glasshouse Květná have participated on the Macef trade fair in Italian Milano or Blickfang exhibition in Switzerland Zurych.

MF Dnes have drawn attention to the fact; Germany, which has symbolised the rich and expensive country for Czechs twenty years ago, is now becoming comparably cheaper.

If we go through a little counting, we find out: a bottle of Pilsner Urquell costs 19,90 CZK, meanwhile in Germany it is 15,93 CZK. The beer is four crowns cheaper, and also empties of Pilsner pay for more in the Czech Republic, than in Germany.

It would be very lucrative to build a business on it, however there is a problem; beer sold in the CR must have a Czech label.

Why the company Plzensky Prazdroj, the maker of Pilsner Urquell, puts its prices so high? They can afford it, as every second beer drunk in the Czech Republic is made by the company. They are setting the price. In 2006 it made 130 millions €, which makes it tenth most profitable company in the CR.

Even when it doesn’t have to be obvious, we Prague people live quite a high standard life. If have a look at stats, we see Prague is twelve most rich region of the EU.

Prague has always been ahead of other regions, and the trend is strengthening now. At the moment, Prague produces 25% of Czech GDP. In practice, it means people have higher average salary, companies and banks build its main seats in Prague, which attract more companies to Prague, which again means more money for people.

It is logical. “The Czech Republic is a small country and for large companies it is enough to have one main seat for managing the whole country.” an economist Patria Online David Marek stated.

When Skoda Auto introduced , during the Christmas season, their skoda-cake advertisement, it was just one of the ads they show to the world. By the way, the British Television Advertising Craft Awards went to this ‘baking’ advertisement.

Skoda advertisements have their place reserved at the web Ads of the Wold, which maps creative ideas, like the one when Skoda inform es they re-plant forests at various places of Earth; “Skoda compensates for the pollution of its cars, reforesting specific areas in the world.” (picture)

The second most well-known Czech product is beer, and the Kozel brand advertisements are recognized by world’s creative minds. Kozel is the beer with the billy-goat in its emblem, and the billy-goat propagates the beer e.g. by presenting ‘beer receipts’ in Finland, or by re-cycling the 3D glasses idea in Russia.

The biggest Czech travel agency was sold by its owners to the investment group Odien. They want to invest hundreds of millions to the Czech Republic.

After 12 years Cedok changes its owner. The Unimex company sold 98 percent of Cedok to the American investment company Odien. The price is kept secret.

Because Cedok has moiety of exotic travel agency Eso Travel, the Americans have a half of this company now, too. The American holding Odien wants to invest into more travel agencies in the CR, as they expect the tourist trade to grow in Middle Europe.

Cedok is a company with long history and well-known name. It started in 1920 as a Czechoslovak tour and travel company, which mostly took customers to Adriatic sea. Its name was made famous during communism, as it had no competition as a state company.